2023-5-29 12:22 |
Coinspeaker
Tether (USDT) Stablecoin Market Dominance Rises as USDC Declines amid Global Economic Woes
The tendency of global policymakers to print money out of thin air, raising the overall inflation has increased the adoption of digital assets in the recent past. Evidently, Bitcoin price gained significantly YTD fueled by economic woes including the global banking crisis. According to the latest crypto price oracles from TradingView and Coingecko, Bitcoin price had gained as much as 69 percent YTD, during the early Asian market on Monday.
Despite the overall decline in crypto trading volume and liquidity, institutional investors have proliferated into the cryptocurrency market through the decentralized financial ecosystems (DeFi). However, due to the high rate of crypto volatility, the stablecoins market has gained a lot of ground in the recent past.
Tether (USDT) Rules Stablecoin MarketAlthough marred with transparency issues compared to its largest competitor Circle USDC, Tether has significantly gained more users in the recent past. Tether USDT has managed to remain largely pegged to the United States dollar despite the economic downturns. Notably, Tether USDT recently announced that it will regularly allocate up to 15 percent of its net realized operating profits towards purchasing Bitcoin as a reserve currency.
As a result, the company announced that it held about $1.5 billion worth of Bitcoin in its reserves at the end of March. Ultimately, the move is a mutual benefit as Bitcoin will have more liquidity while the company benefits from BTC’s long-term bullish prospects.
Tether has as a result been gaining notable traction against its market competitors as depicted by its dominance. Already available on 409 crypto exchanges and many more payment platforms and DeFi protocols, USDT is highly liquid compared to most digital assets.
According to aggregate data provided by CoinGecko, Tether USDT had a market dominance of about 66 percent compared to USDC at 23 percent. With the total stablecoin market capitalization at about $128.612 billion, tether USDT had a valuation of approximately $83.13 billion. Circle USDC, on the other hand, had a market capitalization of approximately $29 billion and a 24-hour trading volume of about $3.2 billion.
The rise of Tether USDT was significantly cemented after the United States financial regulators stated that Binance-backed BUSD is unregistered security. The Paxos-issued stablecoins have seen their market share significantly decline to about 4.18 percent after the company was forced to cease further minting of BUSD.
Favouring ConditionsThe United States dollar remains the most used reserve currency around the world despite the rise of the BRICS organization led by Russia and China. With the rise of inflation among most countries, the use of Tether USDT has increased exponentially in the past year. Moreover, the digital economy has significantly increased with the rise of the cryptocurrency market.
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